Sh Ravinder singh Gugnani, Amritsar. V. The Income Tax Officer, (Tech.), Amritsar.

ITA 376/ASR/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8677 (ITAT-AMRITSAR)
• Duration Of Justice: 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-02-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 04-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHARAM SINGH
• Assessee Lawyers: SUDHIR MEHRA
• Keywords: Opportunity of being heard
• Section: 43B; 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH.T.S. KAPOOR, ACCOUNTANT MEMBER AND SH.N.K.CHOUDHRY, JUDICIAL MEMBER I.T.A NO.376(ASR)/2016 ASSESSMENT YEAR: 2007-08 SH. RAVINDER SINGH GUGNANI, PROP M/S. RAAGA INTERNATIONAL, C/O MR. SUDHIR MEHRA, ADV. 12, PARK LANE, RANI-KA-BAGH, AMRITSAR. PAN:AAQPG-4741E VS. ITO(TECH.), AMRITSAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. SUDHIR MEHRA (ADV.) RESPONDENT BY: SH. DHARAM SINGH (DR.) DATE OF HEARING: 23.02.2017 DATE OF PRONOUNCEMENT:20.03.201 7 ORDER PER T. S. KAPOOR (AM): THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE ORD ER OF LD. CIT(A), JALANDHAR, DATED 29.01.2015, FOR ASST. YEAR: 2007-0 8. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. (I) BASED ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE APPELLANT RESPECTFULLY SUBMITS THAT LD. CIT(A) HAS ERRED IN L AW AND IN FACTS OF THE CASE IN DISMISSING THE APPEAL ON THE GROUND OF NON- PROSECUTION. (II) THAT THE ORDER OF LD. CIT(A)-1, AMRITSAR DIS MISSING THE APPEAL ON THE GROUND OF NON-PROSECUTION IS ERRONEOUS AND MISCONCE IVED. (III) THAT THE EX-PARTE ORDER OF LD. CIT(A), DISMIS SING THE APPEAL OF THE APPELLANT IS NEITHER A REASONED OR SPEAKING ORDER N OR THE MERITS OF THE CASE HAVE BEEN DISCUSSED AS SUCH, IS NOT IN ACCORDA NCE WITH LAW. ITA NO.37 6(ASR)/2016 ASST. YEAR: 2007-08 2 (IV) THAT THE APPELLANT PRAYS THAT THE IMPUGNED OR DER OF THE CIT(A)-1, AMRITSAR, BE KINDLY ORDERED TO BE SET ASIDE TO THE FILE OF LD. CIT(A) WITH A DIRECTION TO DISPOSE OF THE APPEAL OF THE APPELLANT AFRESH, IN ACCORDANCE WITH LAW AFTER AFFORDING ADEQUATE OPPORTUNITY OF HE ARING THE APPELLANT. 3. THE BRIEF FACTS OF THE CASE AS NOTED IN THE ASSESSMENT ORDER ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS O F MANUFAC TURING AND TRADING IN RICE, JUTE AND CLOTH BAGS. THE ASSESSEE FURNISHED T HE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.NIL. THE CASE WAS SELE CTED FOR SCRUTINY UNDER CASS AND NOTICE UNDER SECTION 143(2) WAS ISSU ED ON 26.09.2008. THEREAFTER, NOTICE UNDER SECTION 142(1) AND 143(2) ALONGWITH A QUESTIONNAIRE WERE ISSUED ON 06.11.2009. A PERUSAL OF ASSESSEES COMPUTATION SHOWS NET LOSS OF RS.26,57,622/- AS PER P&L ACCOUNT WHEREAS AFTER MAK ING DISALLOWANCES INCOME HAS BEEN CALCULATED AT RS.10,07,317. ON ADJU STMENT OF BROUGHT FORWARD LOSS FROM ASSESSMENT YEAR 2006-07 AMOUNTING TO RS.91,53,425/- RESTRICTING IT TO THE EXTENT OF RS.1 0,07,317/- INCOME RETURNED IS RS. NIL. 4. AGGRIEVED WITH THE ORDER, THE ASSESSEE FIL ED APPEAL BEFORE LD. CIT(A) AND THE LD. CIT(A) CONFIRMED THE DISALLOWANC ES MADE BY THE A.O BY OBSERVING AS UNDER: 02. FURTHER IT IS EMERGING FROM FACTS AND CIRCUMS TANCES OF THE CASE THAT THE APPELLANT IS NOT CARING TO COMPLY WIT H OPPORTUNITY NOTICES ISSUED U/S 250(1) OF THE INCOME TAX ACT.196 1. SL NO. NOTICE DT. FIXATION DT. MODE SERVICE REMARKS NARRATING FATE. 1 13.03.2012 22.03.2012 BY SPEED POST REMAINED UNCOMPLIED & UNATTENDED, AS ITA NO.37 6(ASR)/2016 ASST. YEAR: 2007-08 3 NEITHER ANYBODY ATTENDED NOR ANY WRITTEN REPLY FILED. 2 06.09.2012 19.09.2012 BY SPEED POST REMAINED UNCOMPLIED & UNATTENDED, AS NEITHER ANYBODY ATTENDED NOR ANY WRITTEN REPLY FILED. 3 21.10.2014 31.10.2014 BY SPEED POST REMAIN UNCOMPLIED & UNATTENDED, AS NEITHER ANYBODY ATTENDED NOR ANY WRITTEN REPLY FIELD 4 30.09.2015 12.10.2015 THROUGH AO COUNSEL FOR THE ASSESSEE SOUGHT ADJOURNMENT FOR 02.11.2015 5 02.11.2015 REMAINED UNCOMPLIED & UNATTENDED, AS NEITHER ANYBODY ATTENDED NOR ANY WRITTEN REPLY FILED 6 23.12.2015 31.12.2015 (FINAL OPPORTUNITY) BY SPEED POST. REMAINED UNCOMPLIED & UNATTENDED, AS NEITHER ANYBODY ATTENDED NOR ANY WRITTEN REPLY FILED UNDER THE CIRCUMSTANCES, I AM OF THE VIEW THAT ASSE SSEE IS NOT INTERESTED IN PURSUING OF THE PRESENT APPEAL AND TH E SAME IS LIABLE TO BE DISMISSED ON THIS GROUND ITSELF. THE LAW ASSISTS TH OSE WHO ARE VIGILANT AND NOT THOSE SHOW SLEEP OVER THEIR RIGHTS. THE PRI NCIPLE IS WELL EMBODIED IN THE WELL KNOWN DICTUM VIGILANTIBUS, NON DORMENT IBUS, JURA SUBVENIUNT. IT IS CLEAR FROM THE FACTS AND CIRCUMSTANCES OF TH E CASE THAT THE AO HAS PASSED A WELL REASONED ORDER ON ACCOUNT OF D ISALLOWING VARIOUS EXPENSES U/S 43B AND OTHER EXPENSES BEING PERSONAL AND UNVOUCHED. THUS KEEPING IN VIEW OF THE GROUNDS OF APPEAL AND A SSESSMENT ORDER IT IS FOUND THAT THE AOS DECISION IS CORRECT. HENCE THE APPEAL IS DISMISSED. ITA NO.37 6(ASR)/2016 ASST. YEAR: 2007-08 4 5. FEELING AGGRIEVED BY THE ORDER OF LD. CIT(A), TH E ASSESSEE FILED THE INSTANT APPEAL WHICH IS UNDER CONSIDERATION. 6. AT THE OUTSET, THE LD. AR SH. SUDHIR MEHRA ARGUE D THAT THE LD. CIT(A) HAS PASSED THE ORDER UNDER CHALLENGE IN A HU RRIED MANNER AS HE HAD NOT GIVEN PROPER AND FAIR OPPORTUNITY TO THE AS SESSEE TO REPRESENT THE CASE, EVEN OTHERWISE, THE LD. CIT(A) FAILED TO GIVE INDEPENDENT REASONS WHILE UPHOLDING THE ASSESSMENT ORDER PASSED BY THE LD. AO. THE LD. AR SUBMITTED THAT ASSESSEE HAD SUFFERED HUGE LOSSES AN D HIS PERSONAL & BUSINESS ASSETS WERE TAKEN OVER BY FINANCIAL INSTIT UTIONS AND THEREFORE, HE HAD GONE INTO DEPRESSION AND HAD LEFT ABROAD FOR TREATMENT AND THAT IS WHY NOTICES SENT ON HIS ADDRESS REMAINED UNSERVE D. 7. ON THE CONTRARY, IT WAS ARGUED BY THE LD. DR THA T IN THE IMPUGNED ORDER, PARA NO.2 ITSELF, SPEAKS THAT SIX OPPORTUNIT IES WERE GIVEN TO THE ASSESSEE TO REPRESENT HIS CASE, HOWEVER, THE ASSESS EE FAILED TO AVAIL THE OPPORTUNITIES AND DELIBERATELY DID NOT PARTICIPATE TO DEMONSTRATE HIS CASE. EVEN OTHERWISE, THE LD. CIT(A) CONCLUDED BY CONFIRM ING THE ASSESSMENT ORDER WHILE APPLYING HIS MIND INDEPENDEN TLY. 8. WE HAVE GONE THROUGH THE FACTS AND CIRCUMSTA NCES OF THE CASE. AS IT REFLECTS FROM THE ORDER PASSED BY THE LD. CIT(A) IN PARA NO.2 THAT SEVERAL OPPORTUNITIES WERE GIVEN TO THE ASSESSEE. HOWEVER, FROM THE LETTER FILED ITA NO.37 6(ASR)/2016 ASST. YEAR: 2007-08 5 BY COUNSEL OF ASSESSEE BEFORE LD. CIT(A), WE OBSERV E THAT ASSESSEE HAD SUFFERED SEVERE DEPRESSION DUE TO HUGE FINANCIAL LO SSES AND HAD LEFT ABROAD FOR TREATMENT. WE FURTHER OBSERVE THAT ON 12 .10.2015, THE COUNSEL OF THE ASSESSEE DID APPEAR AND SOUGHT ADJOU RNMENT AND THE CASE WAS FIXED FOR 2.11.2015. THE LD. CIT(A) IN HIS ORDER HAS WRITTEN THAT ON 2.11.2015 NOBODY APPEARED BUT FROM THE LETTER FI LED BEFORE LD. CIT(A) ON 30.05.2016, WE FIND THAT LD. COUNSEL HAD CLAIMED THAT HE DID APPEAR ON 2.11.2015 BUT HEARING COULD NOT TAKE PLACE AS LD . CIT(A) WAS BUSY IN SOME OTHER CASE. THE RELEVANT SUBMISSIONS OF THE LD. COUNSEL AS CON TAINED IN LETTER DATED 30 TH MAY, 2016 ADDRESSED TO CIT(A) ARE REPRODUCED BELOW . THAT THE APPELLANT HAD DURING F.Y:2005-06 SUFFERED HUGE BUSINESS/FINANCIAL LOSSES IN HIS BUSINESS OF EXPORT OF RICE, DUE TO STEEP FLUCTUATION OF RICE IN THE INTERNATIONAL MARKET. AS A RESULT ALL HIS PERSONAL & BUSINESS ASSETS WERE TAKEN OVER BY BANKING INSTIT UTIONS AND BUSINESS PREMISES SHUT DOWN. BEING UNABLE TO COPY WITH THE B AD TIMES & FINANCIAL CRISES, IT IS GIVEN TO UNDERSTAND THAT HE HAD GONE INTO SEVERE DEPRESSION AND LEFT FOR ABROAD FOR TREATMENT. AS A RESULT ALL THE NOTICES SENT ON HIS ADDRESS SEEM TO HAVE BEEN RETURNED BY THE POSTAL AU THORITIES, UN-SERVED. 2) THE SERVICES OF THE UNDERSIGNED WERE HIRED FOR T HE FIRST TIME FOR CONDUCTING THE SCRUTINY ASSESSMENT FOR AY 07-08 AND CONDUCTING THE INSTANT APPEAL CASE AND WAS NOT AWARE OF NON- SERVI CE OF THE NOTICES SENT BY YOUR GOOD OFFICE BY SPEED POST. HOWEVER ON BEING APPROACHED BY THE CONCERNED ITO AT THE DIRECTION OF YOUR GOOD OFFICE, THE UNDERSIGNED HAD RECEIVED THE NOTICE OF APPEAL DATED 30-09-2015 AND SOUGHT ADJOURNMENTS ON 12-10-2015. ON THE NEXT DATE OF HEARING ON 02-11 -2015 THE UNDERSIGNED PERSONALLY VISITED YOUR GOOD OFFICE BUT THE HEARING COULD NOT TAKE PLACE SINCE YOUR HONOUR HAD BEEN PRE-OCCUPIED WITH OTHER WORK. HOWEVER YOUR HONOUR'S INSPECTOR/OFFICE IN-CHARGE WA S INTIMATED THAT SINCE CERTAIN RELEVANT INFORMATION SOUGHT FROM THE CONCERNED INCOME TAX OFFICER, WHICH IS DEEMED NECESSARY TO PREPARE THE - APPEAL CASE AS PER OUR LETTER DATED 14-01-10 HAS NOT BEEN RECEIVED AS SUCH AN ADJOURNMENT IS BEING REQUESTED. COPY OF THE LETTER DATED 14-01-10 WAS HANDED OVER TO HIM AND HE ASSURED THAT THE SAME WOULD BE PUT UP BE FORE YOUR HONOUR AND A FRESH NOTICE WOULD BE ISSUED. ITA NO.37 6(ASR)/2016 ASST. YEAR: 2007-08 6 3) ON SUBSEQUENT VISIT TO YOUR GOOD OFFICE IN CONNE CTION WITH ANOTHER APPEAL CASE, I CAME TO KNOW THAT A NOTICE FOR HEARI NG IN THE APPEAL CASE HAS BEEN SENT BY SPEED POST. SENSING THAT THE SAID NOTICE WOULD ALSO REMAIN UN-SERVED, THE UNDERSIGNED VISITED YOUR GOOD OFFICE ON THE DATE OF HEARING I.E. 31-12-15 AS THE UNDERSIGNED WAS ALSO T O APPEAR FOR ANOTHER APPEAL CASE THAT WAS FIXED FOR THE SAID DATE BUT TH E HEARING COULD NOT TAKE PLACE AS YOUR HONOUR HAD BEEN VERY BUSY & PREOCCUPI ED WITH THE HEARING OF LOT OF APPEALS FIXED FOR THE DAY, THE ADJOURNMEN T APPLICATION WAS THEN HANDED OVER TO THE INSPECTOR & YOUR OFFICE IN-CHARG E AT HIS ASSURANCE THAT THE SAME WOULD BE PUT UP BEFORE YOUR HONOUR AND INF ORMED THAT A FRESH NOTICE WOULD BE ISSUED IN DUE COURSE. COPY OF THE A DJOURNMENT APPLICATION DATED 31-12-2015 AND A COPY OF LETTER DATED 25-01-2 010 SEEKING INFORMATION/DOCUMENTS FROM THE OFFICE OF CONCERNED INCOME TAX OFFICER, DEEMED ESSENTIAL TO PREPARE THE APPEAL CASE WAS ALS O ATTACHED THEREWITH. (COPY OF SAID ADJOURNMENT APPLICATION ALONG WITH AN NEXURE, IS ALSO ENCLOSED. IT APPEARS THAT THE ABOVE SAID ADJOURNMENT APPLICAT IONS WERE NOT BROUGHT TO YOUR KIND NOTICE AT THE TIME OF PASSING THE SAID EX-PARTE APPELLATE ORDER, MAY BE DUE TO AN OVERSIGHT. IT IS PERTINENT TO STATE HERE THAT AFTER A LOT OF EFFORTS THE ASSESSMENT PROCEEDINGS FILE WAS FINALLY TRACED WITH ITO WARD 1(2) ASR AND THE INSPECTION OF THE SAME WAS AL LOWED ON 24-03-16. THE CONCERNED ITO ALSO ISSUED A CERTIFIED COPY OF O RDER SHEET, WHICH WAS DEEMED RELEVANT TO PREPARE THE APPEAL CASE FOR PROP ER ADJUDICATION OF THE SAME. THEREAFTER, UNDERSIGNED PREPARED THE PAPER BOOK AND APPROACHED YOUR GOOD OFFICE ON 13TH APRIL 2016 TO REQUEST FOR FIXIN G THE DATE OF HEARING ON ANY DATE CONVENIENT TO YOUR HONOUR CJRING THE WEEK. AND THAT IS WHEN THE UNDERSIGNED CAME TO KNOW THAT THE APPEAL HAS ALREAD Y BEEN DISMISSED ON EX-PARTE BASIS FOR NON APPEARANCE. ALTHOUGH THE SPE ED POST COVER HAD AFREADY BEEN RETURNED BY POSTAL AUTHORITIES FOR THE REASON OF 'INCOMPLETE ADDRESS' IN VIEW OF THE ABOVE FACTS YOUR HONOUR WOULD KINDLY APPRECIATE THAT THE APPELLANT HAS BEEN PREVENTED BY SUFFICIENT CAUSE TO GIVE PROPER OPPORTUNITY OF BEING HEARD AND THERE WAS NO DEFAULT OF NON APPEARANCE ON PART OF THE APPELLANT. THE ARGUMENT OF LD. DR THAT LD. CIT(A) HAS PASSED O RDER ON MERITS ALSO IS NOT ACCEPTABLE AS LD. CIT(A) HAS JUST HELD THAT ASSESSING OFFICER HAD PASSED A WELL REASONED ORDER ON ACCOUNT OF DISA LLOWING VARIOUS EXPENSES U/S 43B & OTHER EXPENSES BEING PERSONAL & UNVOUCHED. THESE FINDINGS RECORDED BY LD. CIT(A) CANNOT BE SAID TO B E A REASONED AND SPEAKING ORDER. THE HONBLE AHMEDABAD BENCH OF ITAT IN THE ORDER ITA NO.37 6(ASR)/2016 ASST. YEAR: 2007-08 7 DATED 20.08.1999 IN THE CASE OF GUJRAT THEMIS BIOSY N LTD. VS. JOINT COMMISSINER OF INCOME TAX HAS HELD AS UNDER: 3. WE HAVE CAREFULLY CONSIDERED THE FACTS AND CIRCUMST ANCES OF THE CASE AS WELL AS SUBMISSIONS MADE BEFORE US. THE IMPUGNED ORDER PASSED BY THE CIT(A) IS CLEARLY VIOLATIVE OF THE EXPRESS PROV ISIONS OF S. 250(6), WHICH PROVIDES THAT THE APPELLATE ORDERS OF THE CIT(A) AR E TO STATE THE POINTS ARISING IN THE APPEAL, THE DECISION OF THE AUTHORIT Y THEREON AND THE REASONS FOR SUCH DECISION. THE UNDERLYING RATIONALE OF THE PROVISION IS THAT SUCH ORDERS ARE SUBJECT TO FURTHER APPEAL TO THE TRIBUNA L. SPEAKING ORDER WOULD OBVIOUSLY ENABLE A PARTY TO KNOW PRECISE POINTS DEC IDED IN HIS FAVOUR OR AGAINST HIM. ABSENCE OF THE FORMULATION OF THE POIN T FOR DECISION FOR WANT OF CLARITY IN A DECISION UNDOUBTEDLY PUTS A PARTY IN Q UANDARY. SEC. 250(6) EXPRESSLY EMBODIES THE PRINCIPLES OF NATURAL JUSTIC E AND SUCH A PROVISION IS CLEARLY MANDATORY IN NATURE. THE IMPUGNED ORDER PAS SED BY THE CIT(A) IN VIOLATION OF THE PROVISIONS OF S. 250(6) CANNOT, TH EREFORE, BE SUSTAINED. REGARDING THE DECISIONS OF THE DELHI BENCH OF THE T RIBUNAL IN MULTIPLAN INDIA LTD. (SUPRA) CITED BY THE LEARNED CIT(A), WE FIND THAT THE SAID DECISION IS CLEARLY DISTINGUISHABLE. SEC 254 REFERR ING TO THE ORDERS OF THE TRIBUNAL CONFERS PLENARY JURISDICTION ON THE TRIBUN AL IN THE MATTER OF PASSING ORDERS UNDER S. 254(1). THERE IS NO SUCH EX PRESS STIPULATION IN S. 254 AS CONTAINED UNDER THE PROVISIONS OF S. 250(6) RELATING TO THE ORDERS OF FIRST APPELLATE AUTHORITY. THEREFORE, RELIANCE PLAC ED BY THE CIT(A) ON MULTIPLAN INDIA LTD. (SUPRA) IS ENTIRELY MISPLACED. SIMILARLY, THE CASE OF LATE TUKOJIRAO HOLKAR (SUPRA) CITED BY THE LEARNED CIT (A) IS DISTINGUISHABLE AND DOES NOT SUPPORT THE VIEW TAKEN BY THE CIT(A). THEREFORE, IN VIEW OF THE ABOVE FACTS AND CIRCUMSTA NCES, WE DEEM IT APPROPRIATE TO REMIT BACK THE FILE TO LD. CIT(A), W HO SHOULD PASS A SPEAKING ORDER AFTER HEARING THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO APPEAR BEFORE LD. CIT(A) WITHIN A REASONABLE PERIOD AND SHOULD COOPERATE IN THE PROCE EDINGS. 9. IN VIEW OF THE ABOVE, THE APPEAL FIELD BY ASSESS EE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 20.03. 2017 . SD/- SD/- (N.K.CHOUDHRY ) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:20.03.2017. /PK/ PS. ITA NO.37 6(ASR)/2016 ASST. YEAR: 2007-08 8 COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER